Four of Europe’s largest telecom companies formally informed the European Commission of a joint venture to build a technology platform for digital advertising, according to a filing published on Monday (9 January).
A group of telco heavyweights, including Deutsche Telecom, Orange, Telefonica and Vodafone, want to “offer a privacy-led, digital identification solution to support the digital marketing and advertising activities of brands and publishers,” according to the official filing.
The initiative is an attempt by the telecom operators, who have been complaining about shrinking profit margins for the last decade, to move into the profitable online advertising market.
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This market is currently highly concentrated in the hands of Big Tech companies like Google and Apple. This concentration might increase following the phase-out from third-party cookies in favour of an ad technology that could harm other actors in the advertising ecosystem.
As a result, major European publishers have been backing the project. Since May, Deutsche Telecom and Vodafone have been trialling the project in Germany with a restricted number of advertisers and publishers, including Axel Springer’s website Bild.de and RTL.
The idea is that, when connecting the operators’ network, the user would be assigned a token called TrustPid, which uses the IP address to create a pseudonymous token that is then commercialised for marketing purposes.
“The network operators or TrustPid do not pass on any customer data, such as demographic or network data,” the project’s webpage states.
The pseudonymous tokens are produced for each website, meaning there is no possibility of producing an extensive user profile like with cookies. However, the different tokens are combined via a ‘secure matching’ that prevents the advertising from being shown too many times to the same person.
During the trial, the two companies have been in close dialogue with the BfDI, Germany’s federal data protection authority, on optimising privacy and compliance with European data protection rules.
